Defensive market should see recovery and end 2018 with sales of $10 billion in Brazil, projects Adama president

 

Adama Brazil's president Rodrigo Gutierrez has indicated that the Brazilian agrochemicals market is expected to recover in 2018. According to him, the year may close with sales of US$10 billion compared with $8.6 billion that was recorded in 2017.

 

"Last year was a time when the market fell significantly in Brazil and there was a very large stockpile from 2016 to 2017. Next year, we will clearly see a significant rise in producer prices, as the industrial sector no longer has stocks that it had before and the cost of raw materials has exploded in China," he said.

 

This is because, according to him, the transfer of the increase in costs to the producer was still small, due to the high stock of inputs of the industry. He added that this was a complicated time for the industry as the market was registering lower margins "for everyone".

 

"We see a very worrying scenario because despite the profitability in the country, on average, the producer is not so secure. In some areas, he has invested heavily and has no room for error. We do not believe that the farmer will lose money, but the margin is falling," said the expert.

 

The executive, who works for the company controlled by ChemChina, said production costs in China should remain very high. Thus, he pointed out, that it is quite possible that Adama will begin to redirect the manufacture of some of its new products to Brazil, in order to strengthen the market and create an outlet.